The level of damage a structure sustains during a flood may have a significant impact on how the rebuilding or repair project is viewed by FEMA, local building officials and flood insurance administrators. The key term to know is “substantial damage.”
After a flood, local officials will evaluate each structure to determine the level of damage. A building is considered substantially damaged if it is in the Special Flood Hazard Area and requires repairs that will cost at least 50 percent of the structure’s pre-flood market value.
Substantially damaged structures will be required to meet all local regulations for building in a floodplain. Often that means the structure will need to be elevated or relocated to reduce, or mitigate, its future flood risk. Floodproofing is also an option for non-residential structures. In cases of extreme damage, owners may choose to demolish a structure rather than rebuild to the local standard.
To assist with meeting those local regulations, most National Flood Insurance Program (NFIP) policies include Increased Cost of Compliance (ICC) coverage. ICC provides up to $30,000 to comply with local floodplain policies, in addition to the regular insurance payout. The combined payout, however, may not exceed the policy limit of $250,000 for a home or $500,000 for a commercial structure or a residential property with five or more units.
Requiring substantially damaged buildings to meet floodplain requirements will reduce their likelihood of future flood damage and repetitive insurance payouts. It also will reduce the property’s flood insurance premiums and preserve the structure’s value. Additionally, structures that have not been mitigated are more likely to be abandoned, contributing to neighborhood decay.
For more information about NFIP, call 800-427-4661 or your insurance agent.
Texans can go to www.facebook.com/FEMAHarvey/, https://twitter.com/femaregion6, and www.fema.gov/disaster/4332 this week and throughout May to learn how NFIP can protect them from disaster. Texas NFIP 2018 is a whole month dedicated to sharing tips with Texans about how they can prepare themselves and their homes for hurricane season. Use #TXNFIP18 to find information online and share with your friends and family.
For additional information on Hurricane Harvey and Texas recovery, visit the Texas Division of Emergency Management website at https://www.dps.texas.gov/dem/.